Bill Browder's
Testimony to the Senate Judiciary Committee

“I hope that my story
will help you understand the methods of Russian operatives in
Washington and how they use U.S. enablers to achieve major foreign
policy goals without disclosing those interests,” Browder writes.

The
financier Bill Browder has emerged as an unlikely central
player in the ongoing investigation of Russian interference in the 2016
elections. Sergei Magnitsky, an attorney Browder hired to investigate
official corruption, died in Russian custody in 2009. Congress
subsequently imposed sanctions on the officials it held responsible for
his death, passing the Magnitsky Act in 2012. Russian President
Vladimir Putin’s government retaliated, among other ways, by suspending
American adoptions of Russian children.

Natalia Veselnitskaya, the Russian lawyer who
secured a meeting with Donald Trump Jr., Jared Kushner, and Paul
Manafort, was engaged in a campaign for the repeal of the Magnitsky
Act, and raised the subject of adoptions in that meeting. That’s put
the spotlight back on Browder’s long campaign for Kremlin
accountability, and against corruption -- a campaign whose success has
irritated Putin and those around him.

Browder will testify before the Senate
Judiciary Committee on Wednesday [26Jul2017]
in a hearing about Foreign
Agents Registration Act enforcement; what follows are the prepared
remarks he submitted to the committee. The committee also called as
witnesses former Trump campaign chairman Paul Manafort, Donald Trump
Jr., and Glenn Simpson, the co-founder of the Fusion GPS research firm
that commissioned the Trump dossier. As of Tuesday evening, only
Browder is definitely scheduled to appear during that panel.

Chairman Grassley, Ranking Member Feinstein, and members of
the committee, thank you for giving me the opportunity to testify today
on the Russian government’s attempts to repeal the Magnitsky Act in
Washington in 2016, and the enablers who conducted this campaign in
violation of the Foreign Agents Registration Act, by not disclosing
their roles as agents for foreign interests.

Before I get into the actions of the agents who conducted the
anti-Magnitsky campaign in Washington for the benefit of the Russian
state, let me share a bit of background about Sergei Magnitsky and
myself.

I am the founder and CEO of Hermitage Capital Management. I
grew up in Chicago, but for the last 28 years I’ve lived in Moscow and
London, and am now a British citizen. From 1996 to 2005, my firm,
Hermitage Capital, was one of the largest investment advisers in Russia
with more than $4 billion invested in Russian stocks.

Russia has a well-known reputation for corruption;
unfortunately, I discovered that it was far worse than many had
thought. While working in Moscow I learned that Russian oligarchs stole
from shareholders, which included the fund I advised. Consequently, I
had an interest in fighting this endemic corruption, so my firm started
doing detailed research on exactly how the oligarchs stole the vast
amounts of money that they did. When we were finished with our research
we would share it with the domestic and international media.

For a time, this naming and shaming campaign worked remarkably
well and led to less corruption and increased share prices in the
companies we invested in. Why? Because President Vladimir Putin and I
shared the same set of enemies. When Putin was first elected in 2000,
he found that the oligarchs had misappropriated much of the president’s
power as well. They stole power from him while stealing money from my
investors. In Russia, your enemy’s enemy is your friend, and even
though I’ve never met Putin, he would often step into my battles with
the oligarchs and crack down on them.

That all changed in July 2003, when Putin arrested Russia’s
biggest oligarch and richest man, Mikhail Khodorkovsky. Putin grabbed
Khodorkovsky off his private jet, took him back to Moscow, put him on
trial, and allowed television cameras to film Khodorkovsky sitting in a
cage right in the middle of the courtroom. That image was extremely
powerful, because none of the other oligarchs wanted to be in the same
position. After Khodorkovsky’s conviction, the other oligarchs went to
Putin and asked him what they needed to do to avoid sitting in the same
cage as Khodorkovsky. From what followed, it appeared that Putin’s
answer was, “Fifty percent.” He wasn’t saying 50 percent for the
Russian government or the presidential administration of Russia, but 50
percent for Vladimir Putin personally. From that moment on, Putin
became the biggest oligarch in Russia and the richest man in the world,
and my anti-corruption activities would no longer be tolerated.

The results of this change came very quickly. On November 13,
2005, as I was flying into Moscow from a weekend away, I was stopped at
Sheremetyevo airport, detained for 15 hours, deported, and declared a
threat to national security.

Eighteen months after my expulsion a pair of simultaneous
raids took place in Moscow. Over 25 Interior Ministry officials barged
into my Moscow office and the office of the American law firm that
represented me. The officials seized all the corporate documents
connected to the investment holding companies of the funds that I
advised. I didn’t know the purpose of these raids so I hired the
smartest Russian lawyer I knew, a 35-year-old named Sergei Magnitsky. I
asked Sergei to investigate the purpose of the raids and try to stop
whatever illegal plans these officials had.

Sergei went out and investigated. He came back with the most
astounding conclusion of corporate identity theft: The documents seized
by the Interior Ministry were used to fraudulently re-register our
Russian investment holding companies to a man named Viktor Markelov, a
known criminal convicted of manslaughter. After more digging, Sergei
discovered that the stolen companies were used by the perpetrators to
misappropriate $230 million of taxes that our companies had paid to the
Russian government in the previous year.

I had always thought Putin was a nationalist. It seemed
inconceivable that he would approve of his officials stealing $230
million from the Russian state. Sergei and I were sure that this was a
rogue operation and if we just brought it to the attention of the
Russian authorities, the “good guys” would get the “bad guys” and that
would be the end of the story.

We filed criminal complaints with every law enforcement agency
in Russia, and Sergei gave sworn testimony to the Russian State
Investigative Committee (Russia’s FBI) about the involvement of
officials in this crime.

However, instead of arresting the people who committed the
crime, Sergei was arrested. Who took him? The same officials he had
testified against. On November 24, 2008, they came to his home,
handcuffed him in front of his family, and threw him into pre-trial
detention.

Sergei’s captors immediately started putting pressure on him
to withdraw his testimony. They put him in cells with 14 inmates and
eight beds, leaving the lights on 24 hours a day to impose sleep
deprivation. They put him in cells with no heat and no windowpanes, and
he nearly froze to death. They put him in cells with no toilet, just a
hole in the floor and sewage bubbling up. They moved him from cell to
cell in the middle of the night without any warning. During his 358
days in detention he was forcibly moved multiple times.

They did all of this because they wanted him to withdraw his
testimony against the corrupt Interior Ministry officials, and to sign
a false statement that he was the one who stole the $230 million—and
that he had done so on my instruction.

Sergei refused. In spite of the grave pain they inflicted upon
him, he would not perjure himself or bear false witness.

After six months of this mistreatment, Sergei’s health
seriously deteriorated. He developed severe abdominal pains, he lost 40
pounds, and he was diagnosed with pancreatitis and gallstones and
prescribed an operation for August 2009. However, the operation never
occurred. A week before he was due to have surgery, he was moved to a
maximum security prison called Butyrka, which is considered to be one
of the harshest prisons in Russia. Most significantly for Sergei, there
were no medical facilities there to treat his medical conditions.

At Butyrka, his health completely broke down. He was in
agonizing pain. He and his lawyers wrote 20 desperate requests for
medical attention, filing them with every branch of the Russian
criminal justice system. All of those requests were either ignored or
explicitly denied in writing.

After more than three months of untreated pancreatitis and
gallstones, Sergei Magnitsky went into critical condition. The Butyrka
authorities did not want to have responsibility for him, so they put
him in an ambulance and sent him to another prison that had medical
facilities. But when he arrived there, instead of putting him in the
emergency room, they put him in an isolation cell, chained him to a
bed, and eight riot guards came in and beat him with rubber batons.

That night he was found dead on the cell floor.

Sergei Magnitsky died on November 16, 2009, at the age of 37,
leaving a wife and two children.

I received the news of his death early the next morning. It
was by far the most shocking, heart-breaking, and life-changing news
I’ve ever received.

Sergei Magnitsky was murdered as my proxy. If Sergei had not
been my lawyer, he would still be alive today.

That morning I made a vow to Sergei’s memory, to his family,
and to myself that I would seek justice and create consequences for the
people who murdered him. For the last seven and a half years, I’ve
devoted my life to this cause.

Even though this case was characterized by injustice all the
way through, the circumstances of Sergei’s torture and death were so
extreme that I was sure some people would be prosecuted. Unlike other
deaths in Russian prisons, which are largely undocumented, Sergei had
written everything down. In his 358 days in detention, Sergei wrote
over 400 complaints detailing his abuse. In those complaints he
described who did what to him, as well as where, how, when, and why. He
was able to pass his hand-written complaints to his lawyers, who
dutifully filed them with the Russian authorities. Although his
complaints were either ignored or rejected, copies of them were
retained. As a result, we have the most well-documented case of human
rights abuse coming out of Russia in the last 35 years.

When I began the campaign for justice with this evidence, I
thought that the Russian authorities would have no choice but to
prosecute at least some of the officials involved in Sergei Magnitsky’s
torture and murder. It turns out I could not have been more wrong.
Instead of prosecuting, the Russian authorities circled the wagons and
exonerated everybody involved. They even went so far as to offer
promotions and state honors to those most complicit in Sergei’s
persecution.

It became obvious that if I was going to get any justice for
Sergei Magnitsky, I was going to have to find it outside of Russia.

But how does one get justice in the West for a murder that
took place in Russia? Criminal justice is based on jurisdiction: One
cannot prosecute someone in New York for a murder committed in Moscow.
As I thought about it, the murder of Sergei Magnitsky was done to cover
up the theft of $230 million from the Russian Treasury. I knew that the
people who stole that money wouldn’t keep it in Russia. As easily as
they stole the money, it could be stolen from them. These people keep
their ill-gotten gains in the West, where property rights and rule of
law exist. This led to the idea of freezing their assets and banning
their visas here in the West. It would not be true justice but it would
be much better than the total impunity they enjoyed.

In 2010, I traveled to Washington and told Sergei Magnitsky’s
story to Senators Benjamin Cardin and John McCain. They were both
shocked and appalled and proposed a new piece of legislation called The
Sergei Magnitsky Rule of Law Accountability Act. This would freeze
assets and ban visas for those who killed Sergei as well as other
Russians involved in serious human rights abuse.

Despite the White House’s desire to reset relations with
Russia at the time, this case shined a bright light on the criminality
and impunity of the Putin regime and persuaded Congress that something
needed to be done. In November 2012 the Magnitsky Act passed the House
of Representatives by 364 to 43 votes and later the Senate 92 to 4
votes. On December 14, 2012, President Obama signed the Sergei
Magnitsky Act into law.

Putin was furious. Looking for ways to retaliate against
American interests, he settled on the most sadistic and evil option of
all: banning the adoption of Russian orphans by American families.

This was particularly heinous because of the effect it had on
the orphans. Russia did not allow the adoption of healthy children,
just sick ones. In spite of this, American families came with big
hearts and open arms, taking in children with HIV, Down syndrome, Spina
Bifida and other serious ailments. They brought them to America, nursed
them, cared for them and loved them. Since the Russian orphanage system
did not have the resources to look after these children, many of those
unlucky enough to remain in Russia would die before their 18th
birthday. In practical terms, this meant that Vladimir Putin sentenced
his own, most vulnerable and sick Russian orphans to death in order to
protect corrupt officials in his regime.

Why did Vladimir Putin take such a drastic and malicious step?

For two reasons. First, since 2012 it’s emerged that Vladimir
Putin was a beneficiary of the stolen $230 million that Sergei
Magnitsky exposed. Recent revelations from the Panama Papers have shown
that Putin’s closest childhood friend, Sergei Roldugin, a famous
cellist, received $2 billion of funds from Russian oligarchs and the
Russian state. It’s commonly understood that Mr. Roldugin received this
money as an agent of Vladimir Putin. Information from the Panama Papers
also links some money from the crime that Sergei Magnitsky discovered
and exposed to Sergei Roldugin. Based on the language of the Magnitsky
Act, this would make Putin personally subject to Magnitsky sanctions.

This is particularly worrying for Putin, because he is one of
the richest men in the world. I estimate that he has accumulated $200
billion of ill-gotten gains from these types of operations over his 17
years in power. He keeps his money in the West and all of his money in
the West is potentially exposed to asset freezes and confiscation.
Therefore, he has a significant and very personal interest in finding a
way to get rid of the Magnitsky sanctions.

The second reason why Putin reacted so badly to the passage of
the Magnitsky Act is that it destroys the promise of impunity he’s
given to all of his corrupt officials.

There are approximately ten thousand officials in Russia
working for Putin who are given instructions to kill, torture, kidnap,
extort money from people, and seize their property. Before the
Magnitsky Act, Putin could guarantee them impunity and this system of
illegal wealth accumulation worked smoothly. However, after the passage
of the Magnitsky Act, Putin’s guarantee disappeared. The Magnitsky Act
created real consequences outside of Russia and this created a real
problem for Putin and his system of kleptocracy.

For these reasons, Putin has stated publicly that it was among
his top foreign policy priorities to repeal the Magnitsky Act and to
prevent it from spreading to other countries. Since its passage in
2012, the Putin regime has gone after everybody who has been advocating
for the Magnitsky Act.

One of my main partners in this effort was Boris Nemtsov.
Boris testified in front of the U.S. Congress, the European Parliament,
the Canadian Parliament, and others to make the point that the
Magnitsky Act was a “pro-Russian” piece of legislation because it
narrowly targeted corrupt officials and not the Russian people. In
2015, Boris Nemtsov was murdered on the bridge in front of the Kremlin.

Boris Nemtsov’s protégé, Vladimir Kara-Murza, also traveled to
law-making bodies around the world to make a similar case. After
Alexander Bastrykin, the head of the Russian Investigative Committee,
was added to the Magnitsky List in December of 2016, Vladimir was
poisoned. He suffered multiple organ failure, went into a coma and
barely survived.

The lawyer who represented Sergei Magnitsky’s mother, Nikolai
Gorokhov, has spent the last six years fighting for justice. This
spring, the night before he was due in court to testify about the state
cover up of Sergei Magnitsky’s murder, he was thrown off the fourth
floor of his apartment building. Thankfully he survived and has carried
on in the fight for justice.

I’ve received many death threats from Russia. The most notable
one came from Russian Prime Minister Dmitry Medvedev at the World
Economic Forum in Davos, Switzerland, in 2013. When asked by a group of
journalists about the death of Sergei Magnitsky, Medvedev replied,
“It’s too bad that Sergei Magnitsky is dead and Bill Browder is still
alive and free.” I’ve received numerous other death threats from
Russian sources through text messages, emails, and voicemails. U.S.
government sources have warned me about a planned Russian rendition
against me. These threats were in addition to numerous unsuccessful
attempts that the Russian government has made to arrest me using
Interpol or other formal legal assistance channels.

The Russian government has also used its resources and assets
to try to repeal the Magnitsky Act. One of the most shocking attempts
took place in the spring and summer of last year when a group of
Russians went on a lobbying campaign in Washington to try to repeal the
Magnitsky Act by changing the narrative of what had happened to Sergei.
According to them, Sergei wasn’t murdered and he wasn’t a
whistle-blower, and the Magnitsky Act was based on a false set of
facts. They used this story to try to have Sergei’s name taken off of
the Global Magnitsky Act that passed in December 2016. They were
unsuccessful.

Who was this group of Russians acting on behalf of the Russian
state? Two men named Pyotr and Denis Katsyv, a woman named Natalia
Veselnitskaya, and a large group of American lobbyists, all of whom are
described below.

Pyotr Katsyv, father to Denis Katsyv, is a senior Russian
government official and well-placed member of the Putin regime; Denis
Katsyv was caught by U.S. law enforcement using proceeds from the crime
that Sergei Magnitsky uncovered to purchase high-end Manhattan real
estate (the case recently settled with the Katsyv’s paying $6 million
to the U.S. government). Natalia Veselnitskaya was their lawyer.

In addition to working on the Katsyv’ s money laundering
defense, Ms. Veselnitskaya also headed the aforementioned lobbying
campaign to repeal the Magnitsky Act. She hired a number of lobbyists,
public relations executives, lawyers, and investigators to assist her
in this task.

Her first step was to set up a fake NGO that would ostensibly
promote Russian adoptions, although it quickly became clear that the
NGO’s sole purpose was to repeal the Magnitsky Act. This NGO was called
the Human Rights Accountability Global Initiative Foundation (HRAGI).
It was registered as a corporation in Delaware with two employees on
February 18, 2016. HRAGI was used to pay Washington lobbyists and other
agents for the anti-Magnitsky campaign. (HRAGI now seems to be defunct,
with taxes due.)

Through HRAGI, Rinat Akhmetshin, a former Soviet intelligence
officer naturalised as an American citizen, was hired to lead the
Magnitsky repeal effort. Mr. Akhmetshin has been involved in a number
of similar campaigns where he’s been accused of various unethical and
potentially illegal actions like computer hacking.

Veselnitskaya also instructed U.S. law firm Baker Hostetler
and their Washington, D.C.-based partner Marc Cymrot to lobby members
of Congress to support an amendment taking Sergei Magnitsky’s name off
the Global Magnitsky Act. Mr. Cymrot was in contact with Paul Behrends,
a congressional staffer on the House Foreign Affairs Committee at the
time, as part of the anti-Magnitsky lobbying campaign.

Veselnitskaya, through Baker Hostetler, hired Glenn Simpson of
the firm Fusion GPS to conduct a smear campaign against me and Sergei
Magnitsky in advance of congressional hearings on the Global Magnitsky
Act. He contacted a number of major newspapers and other publications
to spread false information that Sergei Magnitsky was not murdered, was
not a whistle-blower, and was instead a criminal. They also spread
false information that my presentations to lawmakers around the world
were untrue.

As part of Veselnitskaya’s lobbying, a former Wall Street
Journal reporter, Chris Cooper of the Potomac Group, was hired to
organize the Washington, D.C.-based premiere of a fake documentary
about Sergei Magnitsky and myself. This was one the best examples of
Putin’s propaganda.

They hired Howard Schweitzer of Cozzen O’Connor Public
Strategies and former Congressman Ronald Dellums to lobby members of
Congress on Capitol Hill to repeal the Magnitsky Act and to remove
Sergei’s name from the Global Magnitsky bill.

On June 13, 2016, they funded a major event at the Newseum to show
their fake documentary, inviting representatives of Congress and the
State Department to attend.

While they were conducting these operations in Washington,
D.C., at no time did they indicate that they were acting on behalf of
Russian government interests, nor did they file disclosures under the
Foreign Agent Registration Act.

United States law is very explicit that those acting on behalf
of foreign governments and their interests must register under FARA so
that there is transparency about their interests and their motives.

Since none of these people registered, my firm wrote to the
Department of Justice in July 2016 and presented the facts.

I hope that my story will help you understand the methods of
Russian operatives in Washington and how they use U.S. enablers to
achieve major foreign policy goals without disclosing those interests.
I also hope that this story and others like it may lead to a change in
the FARA enforcement regime in the future.

Mr.
Browder's recent book "Red Notice: A true story of high finance,
murder, and one man's fight for justice" is available below:[... 118-page pdf file ...]Although the
testimony of Bill Browder before the Senate Judiciary Committee, as
well as his book Red Notice, rightfully credit him with having the
Magnitsky Act passed in the United States and similar legislation later
passed in Estonia and Canada, they do not mention the tax evasion
techniques in both the United States and the Russian Federation via
off-shore tax havens utilized by himself and his Hermitage Capital
hedge fund.-
Glenn Simpson of Fusion GPS refers to this over 50 times in his
22Aug2017 interview by a Senate Committee, which was released by Dianne Feinstein on 09Jan2018 as a [... 314-page pdf file ...]